When you go to work, what do you pay for lunch? I can’t buy lunch for less than $5.

If I make my own, I pay around $1 for bread, sandwich fillers and some fruit.

So, with about $4 of savings per day, and 48 working weeks per year that means we can save around $960 per year by spending 5 minutes per day.

But… how do you get $14,000?

Simple – compound interest.

Lets assume a few things:

1. No inflation – my lunch has been about $5 to buy for the last 10 years or so – food goes up a bit but not hugely. Let’s ignore inflation to simplify the maths.

2. We cannot get our $960 per year – it’s just too hard. So assume we can only save $800 per year.

3. We can invest our $800 at 10% return. We should be able to better than that, but let’s aim low.

Then, saving $800 per year for 10 years, compounding at 10%, and only tipping in the savings once per year we get:

10 year saving = $800 * (1.1^10 + 1.1^9 + 1.1^8 + … + 1.1^2 + 1.1)

or… $800 * 17.53 = $14024

Imagine – money for nothing!

Now… are you married or partnered, or have children? Want to make more money?

Simple…

If there are two of you and you both do it you save $28,000 over the 10 years. With children, just keep on multiplying that $14K number…

Why 10 years? Why not 20? Most people have a working life of 30 to 40 years… Well, if thats what turns you on, go and calculate it – you’ll be stunned at the results. I’ve used 10 years because it is a nice round number, and a realistic timeframe.

By the way – that 5 minutes per day adds up to 12,000 minutes over the 10 years, which is 200 hours. So the effective rate of pay for your 5 minutes per day is 14,000 / 200 = $70 per hour. You have to be a VERY high flyer to earn that.

Whilst in France in April for that work trip , I used a part of my rest day to visit the Rodin Museum. (pronounce it “Roadann” and you get pretty close.)

August Rodin was a sculptor, born in 1840. He discovered sculpting at the age of 15, and finally died in 1917, aged 77.

The museum is in the middle of Paris, just around the corner from Napolean’s Tomb. It is surrounded by a large walled garden, making it quiet and peaceful inside. The gardens are magnificent, especially on a warm sunny day.

Rodin was prolific in marble, clay and bronze. How anybody can be so damn good I do not know. And you how hard marble is? Damn hard….

I was talking to one of the younger fellows at work the other day, and gave 3 pieces of gratuitous advice I wish I had received when I was 20.

(It is quite possible I received this advice but was not wise enough to accept it, or remember it.)

1. Save 10% of everything you earn. This is your financial freedom fund. Aim to never ever spend it. The 10% is GROSS, not net.

2. Don’t blow your money on nice cars. Cars are a terrible way to use money. If you must buy a car, save for it. Never ever borrow to buy a car. Never buy more than is sufficient. This saving is over and above the 10% in rule 1.

3. Aim to retire when you are 40. You will probably never achieve this, but you might get close. Retirement does not mean playing golf every day. It just means that you can work because you want to, rather than because you have to.

With planning, a little luck, and a lot of discipline, you can achieve financial freedom. You might not make it by age 40, but you should be awfully close by age 50.

Frequent questions:

Q: Why bother – I might not be alive when I’m 40, or 50! Why not enjoy spending everything I earn right now?

A: That’s true. You might not be alive. But if you are, don’t you want to be free to make choices?

Q: How do I save? I have no discipline – I spend everything I earn and I cannot control myself!

A: Set up a separate bank account, or maybe a managed investment fund that do not allow easy withdrawals. Work out what 10% of your gross is, and get your paymaster at work to do a deduction to that account. Then DON’T touch it.

Q: What about emergencies?

A: Is it a real emergency? For example, a hospital bill? If it is real, use your freedom fund. If your “emergency” is that you need a new car, new clothes to look cool, or so on, then go back and re-think.

Obligatory legal disclaimer: The author is not a qualified financial advisor, has no license, and is giving personal opinions. Use or discard as you see fit.

Most people can’t think, most of the remainder won’t think, the small fraction who do think mostly can’t do it very well.

The extremely tiny fraction who think regularly, accurately, creatively, and without self-delusion- in the long run, these are the only people who count.

If you happen to be one of the fretful minority who can do creative work, never force an idea; you’ll abort it if you do. Be patient and you’ll give birth to it when the time is ripe. Learn to wait.

Throughout history, poverty is the normal condition of man. Advances which permit this norm to be exceeded- here and there, now and then- are the work of an extremely small minority, frequently despised, often condemned, and almost always opposed by all right-thinking people. Whenever this tiny minority is kept from creating, or (as sometimes happens) is driven out of a society, the people then slip back into abject poverty.This is known as “bad luck.”.

I read the other day that Sol Trujillo, the new chief of Telstra, has called in the management consultants, and stated that he will be judged by his first 100 days in the new job.

This sort of thing makes me worry.

What is so magical about 100 days? Why not 30 days, or 1000 days? It sounds an awful lot like arbitrary short-term thinking.

And calling in the management consultants is a complete abrogation of management responsibility, with the usual predictable outcomes.

1. Management that call in the consultants are admitting for all to see that they do not know how to manage. (Otherwise why call in the consultants?) If they need to do this they should RESIGN!

2. When did you ever hear of management consultants who recommended taking on MORE staff?

So… what we will see is a predictable outcome. Massive job losses and a degradation in service levels.

The job losses will be immediate and have a consequent immediate positive effect on the short-term financial results. This makes Sol look good to the soothsayers of the markets (otherwise known as the analysts).

The longer term effect of the job losses will be a drop in service levels – mostly in regional areas (because of distances, rural and regional areas are most sensitive to labour levels). This will take longer to become apparent, but hey – who cares about long-term outcomes?

—————
Declared interest: I own Telstra shares. Sol will probably be good for lifting the lousy price of my Telstra shares over the next 6-12 months. He probably won’t be good for the performance of my shares over the next 5 years, and he probably won’t be good for Telstra customers. I’d rather have good long term performance driven by a happy customer base, thanks.

So let’s toss aside the science, pseudo-science and simulations. It is time for an alternate point of view.

We should be careful with how we use oil & gas, because they are finite resources and once gone, it will be gone forever.

Oil & gas are useful for making all kinds of things – such as dyes, pharmaceuticals, polymers, plastics – to name only a few. Without oil & gas, these can still be made, but with much more difficulty and expense.

These precious natural resources are so easily wasted – through burning it to heat golf courses, driving big cars, or making throw-away plastic packaging. Every time we waste, we deprive a future generation from the high value benefits of those raw materials.

It could be argued that the things we throw away today will be the feedstock of the future. Maybe. With the amount of contamination in landfill sites, I doubt it. And once oil & gas are burned – there is nothing left to reclaim.

So, I’m not really interested in the Greenhouse effect – which seems at worst speculation, and at best an educated guess. There are too many variables, and too many assumptions.

The argument that wasteful use of natural resources robs future generations is clear and simple. It cannot be refuted.

We have a MORAL obligation to use natural resources wisely and carefully.

Of course, this carries no weight at all in a modern capitalist market economy – more on that any time.

This is an unusual piece of fiction, because it comes with an extensive bibliography. Crichton spent about 3 years reading scientific papers about Global Warming and the Greenhouse Effect, before writing this book.

Throughout, you will find footnotes referencing scientific papers published in mainstream journals.

I started out reading this being a lukewarm doubter about global warming. Now I’m a definite unbeliever.

It seems like we have been hoodwinked by a bunch of people pushing their own agendas:

- researchers have an industry all to themselves – it is called getting the next research grant (if they came up with a conclusive answer to anything they would be out of a job)

- environmentalists – who need to have a cause to rally around, so if they cannot find something with a big impact, they take a small impact and exaggerate

- politicians – who need to have something for the population to fear, or who leap onto whatever bandwagon is passing in order to show how green, or mean or whatever, they are.

I know it is only one persons opinion, and the data can be quoted selectively. However, Crichton goes through selective quoting of data – he EXPOSES that little trick.

Almost every day we are told by our news media and politicians that global warming is proven beyond doubt. In fact, there is no conclusive evidence. For every part of the world showing a warming trend, there is another showing a cooling trend. Quote whichever data best suits your agenda.

Perhaps the 2 most important points are:

. All of the predictions of dire and catastrophic things happening in the next few hundred years are based on computer simulations. These are very sensitive to the assumptions on which they are based, and for all practical purposes can show anything you want them to show. Seeing as our weather forecasters have difficulty predicting localised weather patterns 10 days ahead, it seems to be stretching credibility to predict anything 100 years from now.

. And… Kyoto is a complete waste of space. All it will do is cause the western developed nations to spend vast amounts of money trying to reduce emissions whilst the developing countries can pollute all they like. One spends money and stifles its economy, reducing employment, the other messes in its own back yard but creates wealth and employment. Talk about shooting your own feet with both barrels.

In spite of this, I do not believe we should rush out and burn up all the oil, gas and coal in a mad frenzy of anti-greenhouse consumption. There are moral reasons for conserving, but more on that another time.

The perfect opportunity you would think for Thai takeaway and a movie.

So, there I was driving home, pick up the order on the way past. 3 nice aluminium dishes full of food… stacked up on top of each other, in a bag, on the front passenger side floor. That was my biggest mistake.

So, tootling off down the road, first corner – stack falls over.

Reach down, cursing – damn damn – grab stack and right it.

Drive slowly and carefully. Hmm. Smell getting stronger. Must be good food!!!

Another corner. Plonk. Over it goes again. Pull off to side of road.

Shove hand down into dark area and try to right stack again. Oh oh. Very messy and damp here. More cursing.

Manage to pull stack upright again. Turns out the Coconut BBQ chicken was on TOP with a very large amount of yummy coconut sauce.

Both hands covered on cocnut sauce. What to do? Hmm. Lick fingers. Grab slimy sloppy bag handles in one hand and, drive with the other. Thankfully car is automatic.

Barrel off down road through rain & fog – thankfully nobody else around and no police. How would I ever explain this – driving twisted in the seat – one hand down in the bowels of the passenger side floor area, all covered in coconut sauce, holding a bag????

Finally get home in funny crouched position, holding slimy bag. Rush inside. Curse more. Grab bowl of water and go clean up mess in car.

Gagani’s don’t have a web site (see previous posting), but they do get rave reviews from all over.

Here is what they said in “The Adelaide Review”:

Gaganis Bros Imported Food Wholesalers Pty Ltd
9-13 Bacon St, Hindmarsh. Phone 8346 5766
DON’T LET THE OFFICIAL title of this wonderland in a big shed put you off. It is open to the public and they shop in droves. Anything from portable electrically-turned barbecue rotisseries made to cook a whole lamb on a spit to non-bendy paper plates. Food, spices, tools, knickknacks and grog from places you’ve never heard of. Fruit and veg, even olive trees for sale out the front.

Grind this lot up (mortar and pestle if really keen – I cheat and use a coffee grinder reserved only for spices). Spread over your lamb, leave for a while and then roast.

The spice mix forms a crunch highly flavoured crust, and the flavours go through as well. And, it smells FABULOUS while it’s cooking.

There are an infinite variety of spice mixes you can do. For those living in Adelaide, take a trip to GAGANI’s at 9 Bacon St, Hindmarsh, where you can buy reasonable amounts of whole spices, ridiculously cheaply.

I went to les Invalides – the former hospital for returned soldiers. Only a small part of it is still a hospital, the rest is now used (mainly) for the Museum of the Army. Right alongside is Napoleons Tomb. (That’s the bit with the gold dome.)

Besides being in a very old building with the usual static displays, this museum had two exhibits that are powerful, moving, and disturbing.

The first was a photo exhibition of the fighting on the Russian front.

The second, and far more powerful, is the World War 2 rooms. This display opened in 2000 and covers 4 levels. It needs at least an hour to go through, and that at a very fast clip. Ideally, 1/2 day would be about right. And don’t worry about everything being in French. About 3/4 of the text and placards are in English – which is more than sufficient.

In their own words:

The Musée de l’Armée has the mission to explain a determining conflict in our contemporary history, to transmit to the new generations the memory of those who committed themselves in the fights for democracy and the defence of freedom.

This is one of the most confronting, emotionally wrenching, graphic exhibitions I have ever seen. It has a very French perspective as you would expect. There are not just photographs, there are uniforms, weapons, artifacts, audio, video, etc etc.

I now firmly believe that the degree of suffering and destruction through Europe in the second world war is vastly under-appreciated outside Europe.

If you want to understand why Europeans are the way that are, and have some of the opinions they have, see this exhibition. Then you may gain a tiny glimmer of understanding.

Americans have only had their civil war on their own soil. That was in a time of muskets and flintlocks. Sure there was a lot of death and suffering. Compared to WW2 (only 60 years ago), the American civil war was a Sunday- school picnic.

Americans have never, in their own country, had the massive loss of life (millions of people), the all-encompassing property damage, complete takeover of government, removal of liberty, invasion, occupation, and the all-encompassing psychological damage that comes with it. Instead they inflict this on others and call it liberty.

George Bush, his henchmen, and those who snear at “Old Europe” should go the the Museum of the Army in Paris, and see the World War 2 rooms. Doing so might, just might, help them to understand others and curb their adventurism.

This weekend’s Australian Financial Review had an interesting article about unemployment and Government spending on labour market programs in the US, Britain and Australia.

A couple of figures leapt out:

When the new programs are up and running, the government will spend $800 million a year on additional assistance for about 300,000-plus people.

A quick calculation shows that each of those unemployed people is getting additional assistance spent on them of $2666, per year. That is a lot of taxpayers money.

And another point in the same article:

… The people it will be working with are out of the labour market for a reason. About 60% of the jobless parents, disability recipients and long-term unemployed have no more than year 10 education.

This just goes to reinforce my previous dump about HECS being an evil tax which discourages learning, thinking, and advancement.

If we ignore for the moment that our society and lifestyles are completely insane, it is blindingly obvious that the only general method (for the population as a whole) of having a reasonably secure financial future is to be as educated as you possibly can. Reason: all the numbers that I quote reflect outcomes. The reason for the outcomes is that more education makes a person more flexible, knowledgeable, and employable.

“Everything,” said the Bishop flatly. “You can’t cut a man in two and polish up his soul while you throw his body on the rubbish heap. If the Almighty had designed him in that way, he would have made him a biped who carried his soul in a bag round his neck. If reason and revelation mean anything they mean that a man works out his salvation in the body by the use of material things. A neglected tree, a second-rate fruit, are defects in the divine scheme of things. Unnecessary misery is an even greater defect because it is an impediment to salvation. When you don’t know where your next meal is coming from, how can you think or care about the state of your soul? Hunger has no morals….”

There is a certain amount of Catholic dogma in this, but there is also a very powerful point…

On and off over the years I have been reading the novels of Morris West.

These books certainly do not fall into the cheap trashy novel style, and they are not “johnny-go-get-em” either. West’s writing is perhaps best described as literature.

Each book can be read and understood on many levels. There is always a deeply held moral or philosophical point. Some of them are a bit pretentious. West has a long obsession with the Catholic church. By no means is he an apologist for the Church. Rather he draws out moral dilemmas, exposes hypocrisy, and challenges his readers. He shows the world in all it’s true complexity.

Be prepared to be confronted, challenged, and maybe not to like it. But read a few of the books by Morris West.

It is evil for the person who has to pay it, and it is evil for the long term consequences it has for the Australian economy.

Here is why:

. Most students who study and pay HECS end up as “professionals”. This means they are doctors, lawyers, engineers, scientists, computer programmers, geologists, nurses, teachers, etc.

. People who end up in the professions in general have a higher rate of continued employment. The likelihood of unemployment for university educated people is about 2.1%. (That is not the unemployment rate, it is a long term measure of the probability of being unemployed at a given point in time.) By comparison people who complete year 12 (secondary school) have a probability of about 5%. People who do not make it to year 12 at school have a probability of about 7.5%. This means that the more educated you are, the less call you make on social security through claimed unemployment benefits throughout your lifetime.

. People who end up in these professions in general have higher average salaries, and given our progressive taxation system, pay significantly more in tax over their lifetime than non-professionals. University educated people earn on average about 40% more than those who finish year 12 only.

. And finally, to add insult to injury, university educated people have to pay HECS for the privilege of getting less handouts and paying more tax.

This means that those who get a tertiary education, and have to pay HECS, in fact pay for their education 3 times.

If our government was smart, it would not be charging HECS, it would make tertiary education free – like it used to be. And a smart governement would encourage the employers of those professionals by offering tax breaks. Doing so would raise the tax take by having more professionals in Australia instead of penalising them or driving them to work overseas.